Bookies slash odds on Blair resignation

Bookmakers have slashed the odds on Tony Blair standing down before the next General Election after a flurry of bets speculating on the Labour leadership.

The odds of the Prime Minister quitting have shortened from 10-1 to 5-1 because of speculation that Gordon Brown wants Mr Blair to fulfil his side of the so-called "Granita pact", as well as a spate of other rumours, William Hill said.

"A combination of speculative bets on Blair stepping down, stories that he has a pact with Gordon Brown, that Cherie wants him to quit, and concerns about his personal support with voters, have forced the odds about him ceasing to be PM by the time of the next general election down by 50%," spokesman Graham Sharpe said.

Labour are still odds-on favourites to win the next election at 1-9, the Conservatives are 5-1 while the Liberal Democrats outsiders at 50-1.

Mr Sharpe added: "Labour remain such hot favourites largely because of an apparent dearth of a revival of support for the Tories."

According to Labour legend, the future Prime Minister and Chancellor struck a deal over dinner at the Islington restaurant Granita in 1994 that Mr Brown would give Mr Blair a clear run for leadership of the party made vacant by the death of John Smith.

But Mr Brown was said to have only agreed on condition that Mr Blair would step aside and let his older colleague take over during his second term in office.

At the end of last month the Prime Minister's official spokesman took the unusual step of rejecting reports that the Chancellor was poised to call in the agreement.